# Shanghai Silver Premium Shanghai silver is trading at a 12% peak premium over London/New York prices. This geographic arbitrage breakdown confirms physical shortage. ## What Is the Premium Difference between silver prices in Shanghai vs Western markets (London LBMA, New York COMEX). Normal: ~0% (shipping cost $0.20-0.50/oz). Christmas 2025: 12% premium (record). Current 100-day average: Rising. ## The Arbitrage That Should Work Buy 1M oz in London at $72/oz = $72M. Ship to Shanghai (~$50k). Sell in Shanghai at $84/oz = $84M. Profit: $12M - $50k = $11.95M. This is a 16.6% risk-free return. Why isn't it happening? ## Why Arbitrage Broke Down [[China Silver Export Restrictions 2026|China export restrictions]]: No silver shipments allowed to depart China since January 1st. First export approvals in February (45+ day review). Only 44 approved companies. Creates closed loop. Import difficulties: License required, capital controls, VAT complications, 30-45 day shipping lag. Result: Domestic Chinese market separated from global market. ## What 12% Tells You Chinese industrial users are desperate. Solar panel manufacturers, electronics companies, EV makers. They're saying: "We'll pay 16% above global prices to secure supply NOW because we can't wait for exports to resume." This is a real-time indicator of physical shortage severity. ## The 100-Day Average The spot premium briefly hit 12% at Christmas, then compressed to ~1% as Western prices rallied. But the 100-day moving average continues rising. This matters. The rising average shows the premium isn't a one-time spike. It's structural demand in China that cannot be satisfied at current price levels. ## What It Predicts When all three indicators ([[Silver Lease Rates|lease rates 8.5%]], [[Silver Swap Rates and Forward Curve|swap rates -7.9%]], Shanghai premium 12%) are above their 100-day moving averages simultaneously, the market still requires meaningfully higher prices to balance. If Shanghai premium goes to 15-20%, expect global panic as industrial users realize physical silver is unobtainable at any reasonable price. Links: [[Silver MOC]] | [[China Silver Export Restrictions 2026]] | [[Silver Arbitrage Breakdown]] --- #silver #china #markets